Market Overview
On Monday, the S&P 500 Index ($SPX) closed up by +1.54%. The Dow Jones Industrial Average ($DOWI) rose by +0.81%, while the Nasdaq 100 Index ($IUXX) gained +2.20%. Additionally, December E-mini S&P futures (ESZ25) increased by +1.56%, and December E-mini Nasdaq futures (NQZ25) rose by +2.22%.
Government Shutdown Impact
The US stock markets closed significantly higher on hopes that the government will reopen soon. A group of eight Senate Democrats broke ranks to collaborate with Republicans in advancing a bill for the government’s reopening, which improved market sentiment. Although the Senate has yet to schedule a final vote and the House must approve the measure, it includes full-year funding for certain departments and payment for furloughed workers.
Market Reactions and Economic Insights
Stocks continued to rise after the White House showed support for a bipartisan agreement to resolve the government shutdown. House Speaker Johnson indicated that lawmakers would be given 36 hours’ notice before returning to Capitol Hill once the Senate passes the bill. The cessation of the shutdown would alleviate some economic uncertainties.
Fed Comments on Economic Outlook
Mary Daly, President of the San Francisco Federal Reserve, expressed optimism that the impact of tariffs has mostly been on goods, with minimal inflation spillover effects. However, she remarked on a softening labor market, cautioning against keeping interest rates elevated for an extended period. Conversely, St. Louis Fed President Alberto Musalem carried a hawkish tone, projecting strong economic rebound in the coming quarter and limited space for further interest rate reductions.
Corporate Earnings Performance
As third-quarter corporate earnings reporting nears completion, 456 S&P 500 companies have shared their results, with 82% exceeding forecasts—marking potential for the most robust quarter since 2021. Earnings have increased by +14.6%, significantly above the anticipated +7.2% growth.
Global Market Trends
International stock markets also saw positive moves on Monday. The Euro Stoxx 50 rose by +1.769%, while China’s Shanghai Composite climbed to a one-week high with a +0.53% increase. In Japan, the Nikkei Stock 225 gained +1.26%.
Stock Movers in Focus
AI infrastructure and semiconductor stocks surged, boosting the overall market. Palantir Technologies (PLTR) saw gains over +9%, and Micron Technology (MU) and Western Digital (WDC) improved by over +6%. Additionally, gold stocks rose sharply as gold prices climbed more than +2% to reach a two-week high. TreeHouse Foods (THS) also experienced significant gains after announcing a buyout agreement.
